Tanzania is facing a growing demand for natural gas, driven by its ambitious energy goals and booming industries. With plans to boost power generation to 5,000 MW by 2030 and expand clean cooking energy to 80% of households by 2034, the country is under pressure to secure reliable gas supplies.
Growing Demand, Shrinking Supply.
Demand for natural gas in Tanzania has surged by 8-10% annually over the last 14 years, yet questions remain over where the additional supply will come from. Major industrial projects, like the upcoming fertilizer plant in Lindi set to consume 70 million cubic feet of gas annually from 2027, further highlight the need for expanded production.
Tanzania has also inked agreements with Rwanda, Burundi, Uganda, and Zambia to export electricity, intensifying local demand.
Meanwhile, the rollout of CNG filling stations and the rise of natural gas-powered vehicles, including DART buses, underscore the need for a broader gas infrastructure. With neighboring countries like Uganda and Kenya pushing for gas imports ahead of pipeline construction, Tanzania’s role as a regional energy hub is under the spotlight.
The Long and Short of Supply Solutions.
To bridge the supply gap, Tanzania is pursuing both short-term and long-term strategies. In the long term, the government is negotiating with Equinor and Shell to build a $42 billion LNG facility, leveraging massive offshore reserves of 16 TCF and 20 TCF, respectively. However, with development of these offshore assets comes with higher costs , these projects are unlikely to contribute in the medium-term(5- 10 years).
This is because, offshore projects require sophisticated subsea infrastructure and liquefied natural gas (LNG) facilities, greatly escalating their capital expenditure.
Meanwhile, Tanzania is preparing for its first upstream licensing round in over a decade, scheduled for May 2025. This move will open 26 exploration blocks, including 23 offshore in the Indian Ocean and three in the Lake Tanganyika basin—a largely untapped region with geological traits similar to East Africa’s oil-rich provinces.
In the short term, efforts are focused on maximizing output from existing fields like Mnazi Bay and Songo Songo. Maurel & Prom’s upcoming drilling of three new wells at Mnazi Bay aims to boost production by 30 million cubic feet per day, raising capacity to 130 MMcf/d.
And the development he world-class Ntorya gas field project (operated by joint venture partners ARA Petroleum Tanzania and Aminex PLC) which require pipeline construction to Madimba Gas Processing Plant.
The Tanzania Petroleum Development Corporation (TPDC) has also launched a 25-year strategic plan emphasizing accelerated exploration of key blocks.
A Pivotal Moment for Tanzania’s Energy Future.
With economic growth tied closely to energy expansion, Tanzania’s dual strategy of offshore exploration and near-field development marks a critical step in meeting domestic and regional demand. As the country gears up for its next phase of energy development, investment will be crucial to unlock its vast natural gas potential and secure its place as East Africa’s energy powerhouse.
